Pace Keeps Utility Reform on the Right Track in New York

June, 19, 2015
John Bowie
Energy Law and Climate Advisor

The New York Public Service Commission adopted several orders on Wednesday that implement new policies resulting from the Reforming the Energy Vision (REV) proceeding. As one of the only non-governmental organizations at the table in all of these proceedings, the Pace Energy and Climate Center (Pace) is making sure REV stays on the right track in New York.

The Commission took up the Consolidated Edison (Con Ed) rate extension, and the Central Hudson Gas & Electric rate case. Rate cases in New York are administrative proceedings in which the Public Service Commission determines the adequate revenues owed to utilities, and the investments necessary to provide safe and affordable service.

Con Ed last went through a rate case in 2013, in the aftermath of Superstorm Sandy. Pace and several parties in the case seized the opportunity to not only rebuild, but to advance new ideas for New York’s energy future. Elements of the 2013 Con Ed rate case became the seeds for REV, an effort to create a clean, economical, distributed energy infrastructure – the system Pace has been trying to create for 25 years.

The 2013 Con Edison settlement provided flat rates for two years with new rate case scheduled for 2015. Early this year, the Public Service Commission Staff convened parties and proposed a rate extension as an alternative to litigating new rates amidst the shifting sands of the REV proceeding. The final agreement locked in the existing 2013 rates for an additional year. Based on Pace’s involvement and engagement by other stakeholders, the agreement took up two other significant issues: the development of new standby rates and a collaborative process to develop the company’s business plan for an advanced metering infrastructure (AMI).

The Commissioner’s approved the extension proposal and the new elements, describing the AMI collaborative as a step forward in developing novel programs. The collaborative business planning process will help ensure that investment in AMI will serve all stakeholders, not just strengthen the incumbent utility. The Commission also cited the collaborative process as an opportunity to consider new REV demonstration projects, and an opportunity to show how new market participants could gain value from AMI. The Commission also commended changes to standby rates as an essential step in the right direction to help New York City’s real estate community invest in clean distributed energy resources.  Despite the progress, the Commission noted that standby rates would continue to evolve through REV, but the changes showed that we are “walking, no longer crawling, but not yet running” toward distributed energy resources.

Similarly to Con Edison, Central Hudson was scheduled for a new rate case amidst the REV proceeding. The company filed its new rate plan in October 2014. Recognizing the confluence of ongoing REV policy development and on-the-ground investment occurring through the rate case, Pace intervened to help provide guidance on clean energy development. After several months of negotiations, the parties produced a settlement proposal, which included several provisions including a collaborative process to develop REV demonstration projects. The group produced several projects, ranging from utility-driven solar programs, to novel community programs such as Community Choice Aggregation championed by our friends at Citizens for Local Power. This effort would create new opportunities for municipalities to control their energy portfolio.

The Commission statements on the Central Hudson case reflected favorably on the process and outcome, in particular, commending the participation of the parties in the process. The Commission also rejected the terms of fixed charges in its final decision, potentially setting a precedent for the treatment of fixed charges in the reformed energy landscape.

Pace applauds these decisions, and working with the PSC, we look forward to driving more clean energy outcomes throughout the year.